The middle class is shrinking just about everywhere in America – The Washington Post

The great American shrinking middle class is not just a Rust Belt or Southern phenomenon.

The great shrinking of the middle class that has captured the attention of the nation is not only playing out in troubled regions like the Rust Belt, Appalachia and the Deep South, but in just about every metropolitan area in America, according to a major new analysis by the Pew Research Center.

Pew reported in December that a clear majority of American adults no longer live in the middle class, a demographic reality shaped by decades of widening inequality, declining industry and the erosion of financial stability and family-wage jobs. But while much of the attention has focused on communities hardest hit by economic declines, the new Pew data, based on metro-level income data since 2000, show that middle-class stagnation is a far broader phenomenon.

The share of adults living in middle-income households has also dwindled in Washington, New York, San Francisco, Atlanta and Denver. It’s fallen in smaller Midwestern metros where the middle class has long made up an overwhelming majority of the population. It’s withering in coastal tech hubs, in military towns, in college communities, in Sun Belt cities.

The decline of the American middle class is “a pervasive local phenomenon,” according to Pew, which analyzed census and American Community Survey data in 229 metros across the country, encompassing about three-quarters of the U.S. population. In 203 of those metros, the share of adults in middle-income households fell from 2000 to 2014.

Pew defines middle-income households here as those making between two-thirds and twice the national median household income. For a three-person household in 2014, that means an income between about $42,000 and $125,000. The fact that median incomes have declined over this same time frame also means that the bar to get into the middle class is actually lower now than it was in 2000. Pew’s metro-level data are also adjusted for household size and local cost of living.

The shrinking middle class is in part a reflection of rising income inequality in America, and of the same underlying and uneven economic forces that have fueled the rise of Donald Trump. And as the middle class has been shrinking, median incomes have fallen, too. In 190 of these 229 metros, the median income dropped over this same time.

As the middle class has shrunk, Pew points out, the lower and upper classes in America have grown in size and significance. In some metros, the middle class is dwindling primarily because families are falling out of it and into the lower class. The share of households in this bottom tier has skyrocketed since 2000, for instance, in Goldbsoro, North Carolina, a railroad junction with an Air Force base.

But in other places, the shrinking middle class is actually a sign of economic gains, as more people who were once middle class have joined the ranks at the top. This has been the case in booming energy hubs like Midland, Texas.

In the Washington, D.C. metropolitan area, the share of adults living in lower-income households has actually held steady over this time. The households disappearing from the middle-class, rather, are reflected in the growing numbers at the top (this does not mean, though, that the same middle-class families are necessarily becoming wealthier; changes in the population makeup of the region may also reflect who moves away from the area and who migrates in).

In total, 172 of these 229 metros saw a growing share of households in the upper-income tier. About as many — 160 — saw a growing share at the bottom. And 108 experienced both: The middle class shrank as the ranks of both the poor and the rich grew.

The places with greatest net economic losses — where the shrinking middle-class has meant a sizable influx of households among the poor — are metro areas that have historically relied heavily on manufacturing, like Detroit, Fort Wayne, Ind., and Springfield, Ohio.

In only about a quarter of all of these metros does the middle class make up less than a majority of the adult population today. But the largest metros in the country fall into this group, including New York, San Francisco, Los Angeles, Boston and Washington. In each of these metros, the middle class is relatively small because the upper-class share of the population is larger than average.

These same metros also tend to have wider income inequality, reflecting the broad spectrum of jobs in industries from the low-paying service sector to finance and biotech. As a result, not surprisingly, Pew’s data shows that metros with greater income inequality tend to have smaller middle classes. When the income distribution is narrower, on the other hand, more people are likely to be clustered in that middle tier between $42,000 and $125,000.